How Insurance Companies Use Drones to Raise Your Rates (and What to Do About It)

If you own a home, you know that homeowners insurance usually requires inspections—at least once, when you initially take out the policy, and often periodically when the renewal comes around. You usually can’t avoid this—the insurer has a right to ensure that they’re not taking on excessive risk. They don’t want to be on the hook for a huge repair bill because you didn’t bother maintaining your roof properly, after all.

Normally, you know when those inspections are coming, so you can prepare your home. But increasingly, insurance companies are using less visible tools to check out the exterior of your home, employing drones and satellite imagery to check that your roof is in good shape, that you’re doing proper maintenance to the exterior walls and landscaping, and that you’re not using your property in a manner that conflicts with your policy agreement. And you need to worry about this because it changes the core dynamic around home inspections. Here’s what you need to know—and how to react.

There are several reasons why drone and satellite-powered inspections are problematic for you as a homeowner:

• Unreliable. The images secured via drone and satellite are usually pretty low-quality. A man living in Florida had his insurance canceled when a drone photographed his roof—he described the photo as looking “like it was taken in 1936.” These images are often plagued by shadows and artifacts that are misinterpreted as damage, and insurers are sometimes picking up satellite images that are years out of date and using them to justify rate increases or policy cancellations.

• Unpredictable. Unlike a scheduled inspection, a drone can fly over and around your house at any time. That means if you’re in the process of repairing some aspect of the home’s exterior or have the work scheduled, the photos can show an inaccurate glimpse of the state of the property. That can lead to false accusations of deferred maintenance or damage, leading to unfair rate hikes or cancelations.

• Lack of warning. These inspections often happen without your knowledge, so the first time you hear about them might be when you receive a notice that your rates are rising or your policy won’t be renewed. At that point, it might be much more difficult to fight the decision if the physical state of your house has changed. And it removes your chance to make adjustments in advance of the inspection if you’re doing something with the property you know could be misunderstood or misconstrued.

Precautions you can take

We’re living in the age of drone inspections, so it’s time to start taking some extra precautions. Your first line of defense against a shocking cancelation or rate hike due to a drone or satellite inspection is to know the basics about your homeowners insurance:

• Cancelation notices: Know the notice requirements for cancelations in your state. If your insurer is relying on an automated system, you might receive a cancelation notice without the proper notice, and you can fight that.

• Complaint process: Don’t wait to research your insurer’s process for disputing changes to your coverage until you’re fighting cancelation—you might only have a few weeks to fight back. Know how to file complaints so you don’t waste time. You should also know how to contact your state’s insurance department in case you need to file a complaint about your insurer’s handling of the situation.

• Review the exterior. You might not even be aware of aspects of your home’s exterior that could be flagged on drone footage or satellite images. If your roof is in good shape but has moss growing on it, for example, that could be flagged. Consider what your home looks like from above.

  Also consider that areas of your home you might consider private are actually exposed to drones and satellites. For example, a trampoline or treehouse in your backyard might seem harmless—and safely hidden from public view. But if a drone spots them on your property, that could be an excuse to cancel your coverage or raise your rates.

What to do before (and after) you receive a rate increase or cancelation

One way to avoid surprise events resulting from drones and satellite photos is to stop waiting for inspections to do necessary maintenance. If you normally wait until your homeowners insurance announces an inspection to get roof repairs and other work done on the house, well, stop doing that. Regular maintenance and repair of the exterior of the home will insulate you from nasty drone-related surprises.

If you receive a rate or cancelation notice from your insurer based on photos taken by drone or satellite that misrepresent the reality of the situation, demand to see the photos used to make the determination. If they’re blurry, low-res, or showing deceptive shadows or angles, take your own photos and submit them as part of the dispute process with your insurer. Chances are, your photos will be clearer and refute the claims.

You can also hire a home inspector to submit a report. If the drone inspection showed signs of disrepair or roof failure, a certified inspector’s report stating the age and condition of the roof may be persuasive.

These days, any dispute about an inspection probably starts online or via email—but it can be worth it to get a human being on the phone. Automated systems often lack flexibility, leading to nonsensical rejections of disputes or requests. If inaccurate, old, or misinterpreted drone photos are ruining your homeowners insurance, getting a person on the phone might be your best chance of flipping that script.

If you know there are aspects of your house that might be flagged by a drone or satellite review of your property—a pool you didn’t inform your insurer about, or that aforementioned trampoline—there’s one final rule: Don’t try to hide it. Covering things with tarps or other camouflage won’t work, and in fact might lead to a policy cancelation all by themselves as they might be seen as red flags.

If you’re concerned about something on your property in regards to your insurance coverage, it’s best to either get rid of it or see if you can add coverage for it to your existing policy. Trying to hide it from the eye in the sky will almost certainly backfire.